They're lucky we only messed with GameStop stock
The next uprising may not be able to be stopped with digital restrictions.
I don’t know anything about stock trading, but I know this: If the greatest revenge that people are enacting on contemptible and criminal hedge fund managers is messing with GameStop stock, then they should consider themselves lucky.
There are far more forceful ways to get even than logging onto Robinhood. That’s for sure.
GameStop shares soared 1,700 percent this week after scores of amateur online traders put the squeeze on at least two hedge funds that had bet that the company’s shares would fall. And it worked. The Wall Street Journal reports one of those giant hedge funds, Melvin Capital, needed a $2.75 billion injection from two other funds, Citadel and Point 72, to offset losses of nearly 30 percent to start the year.
Basically, amateur stock traders are beating hedge fund managers at their own game. Justin Speak, an evangelical pastor from California who’s made $1,700 off GameStop this week, told the New York Times there’s “catharsis” to making some money off the pain of finance bros. His wife put her feelings more succinctly.
“Eat the rich,” she said.
Damn right.
We know only one banker went to jail for his role in the 2008 financial crisis. Everybody else who torpedoed our economy was allowed to keep operating, and pocket that sweet taxpayer bailout money. The Covid-19 stimulus packages have similarly mostly gone to big corporations and rich people. Roughly only one-fifth of the CARES Act went to workers and families, and the second round of money from the Paycheck Protection Program probably won’t find its way to those who need it most, either. To qualify for a PPP loan, businesses need to show they experienced a 25-percent reduction in revenues in one quarter last year—regardless of their revenues for the rest of 2020. Since the whole world was basically shutdown from March-May (outside of Walmart and Target), there probably aren’t many businesses that don’t meet the exceptionally low bar for government aid.
May the best accountants win.
We found out Thursday the U.S. economy shrank by 3.5 percent last year, making 2020 the worst year for economic growth since 1946. After signs of recovery throughout the summer, the job market is once again sagging. The four-week moving average for new unemployment claims stands at 868,000. The pre-pandemic peak was 695,000.
With our economy shedding 10 million jobs over the last year, the number of long-term unemployed Americans promises to only rise dramatically. It currently stands at 3.9 million.
All of those numbers illustrate the dismal reality we can all see, and that some of us are unfortunately living. Stuck at home with no work and no prospects, at least 13 million Americans have flocked to day-trading platforms in recent months. They’ve organized on forums such as Reddit and Discord, and devised this brilliant scheme to rob Wall Street. In addition to GameStop, stock prices for AMC and Blackberry have soared as well.
It’s a populist uprising that’s rooted in the free market. Wall Street types should be thankful the starving and enraged masses are trying to beat them at their own game, rather than attempting to violently destroy it. But they’re not. Robinhood has restricted trading in GameStop and other stocks that were part of this frenzy. When the big banks screw us, it’s business as usual. When we make some money for ourselves at their expense, it’s a national emergency.
Sounds about right.
History tell us this kind of gross inequality is not sustainable. America’s billionaires have grown $1.1 trillion richer during the pandemic, while more than 8 million Americans fell into poverty during the first six months of 2020. Eventually, people are going to rise up, and in some cases, they already have. You can’t tell me our massive rise in homicide rates isn’t directly related to the unprecedented social displacement we’re seeing across the country.
With this in mind, the steadfast refusal of some senators towards giving more relief to the American people is baffling. In the grand scheme of our nearly $5 trillion federal budget, another year of enhanced unemployment benefits and some $2,000 checks is the equivalent of chump change. Give the people crumbs. It will keep us housed and out of the streets—literally and figuratively.
That is assuming, of course, that we actually have it in us. Our horrible leaders clearly think we don’t.
One of the saddest components of the Capitol Insurrection is that it was predicated on something so stupid. Imagine if there was as much widespread anger about the lack of universal healthcare as there is about fabricated cases of voter fraud. But there isn’t, because each political party keeps feeding us its insidious brand of identity politics, meant to pit workers against each other. For Republicans, it’s white grievance, and for Democrats, it’s blaming white racists. White working-class Trump supporters couldn’t possibly be disillusioned with a system that’s done nothing but put them down, they tell us on MSNBC. Instead, they’re just bigots and xenophobes. Some mandated corporate sensitivity courses should do the trick—and create nice well-paying board positions for the politically connected.
It took years to recover from the 2008 financial crisis, and now, we’re witnessing a historic and grotesque transfer of wealth from working people to the upper-class. Meanwhile, our vaccination efforts continue to limp along, with our leaders actively trying to give fewer shots to fewer people. It’s very weird. In my home state of Massachusetts, one of the healthcare capitals of the world, only 43 percent of doses have been administered. And yet, institutions with extra doses, such as Northeastern University, have been told to stop giving them out. It’s almost like some of our governors and mayors don’t actually want this to end. Emergency power is hard to give up.
There is a lot to be angry about. Screwing over some hedge funds is a pretty innocent way to express our rightful rage.
The next uprising may not be able to be stopped with digital restrictions.
I could tell this one was a bit beyond your area of expertise, however, well-written as usual. As a trader, I won't nit-pick about your terminology and logic, but you have a knack for making even the most mundane material seem interesting. BTW...I just realized, you are much easier to read and your eyes are sexier on my ASUS instead of my phone. Peace, brother!